How China Lost Its Mojo: One Town's Story

Once Booming Yantian Looks for New Sources of Growth

YANTIAN, China—Not long ago, this factory town in southeastern China was an emblem of the country's massive export boom. Today, it is a symbol of China's struggle to sustain a growth streak.

Low wages, easy access to overseas markets, and a business-savvy leadership helped transform Yantian in the 1990s from a sleepy agricultural hamlet to a manufacturing hub with close to 150,000 people. By 1998, more than 400 foreign firms set up...